Treaty of Detroit, Competitiveness, Secret Ballots

This week’s deal between General Motors and the United Auto Workers is being hailed as a new era for Detroit, and for once that advertising may be justified. The UAW in particular made historic concessions that show a new awareness of global competition. What’s less encouraging is how much this reality-based compromise still contrasts with the policies that unions and their political friends are promoting in the unreal world of Washington, D.C.

Our friends in the AFL-CIO often think we’re too critical, but we’re not responsible for taking union membership down to 7.4% of the non-government American labor force last year. (See nearby chart.) The reality of a dynamic world economy did that, assisted by the failure to adapt by union leaders and corporate managers. These columns support collective bargaining, and our belief has long been that if a company’s workers vote to join a union, they and the company deserve what they get.

The problem with unions is not all that dissimilar to that posed by entrenched management: Once they win comfortable contracts, they often become impediments to the kind of innovation and flexibility essential to success in today’s economy. So in the name of “job security,” they undermine a company’s–or a nation’s–competitiveness. The result, over time, is less job security for everyone, especially the union workforce. There’s no better example of this than GM, where the UAW now represents about 74,000 hourly workers, compared to 246,000 in 1994. Some security.

Apparently organized labor is not confident in its ability to make the economic case for unions, hence the emphasis on the Employee Free Choice Act as a way to bully people into joining.